February 03, 2010
Sabre Resources May Have A Tsumeb Lookalike On Its Hands In Namibia.
By Our Man in Oz, in Cape Town / www.minesite.com
Investors who have made fat profits from the Namibian uranium twins Kalahari Minerals and Extract Resources will understand immediately the attractions of a little-known copper explorer called Sabre Resources that's operating not that far away. It's all about location and under-explored geology. With Australian-listed Extract and London-listed Kalahari, the value-creation has come from snapping up land adjacent to the big Rossing uranium mine of Rio Tinto.
For whatever reason, the team at Rio didn't bother to look far beyond their backyard, creating an opportunity for newcomers to move in, acquire tenements, make discoveries and build a business worth more than US$2 billion. With Sabre it's all about the people who used to run the big Tsumeb copper mine, also in Namibia. For 100 years they were happy to focus on the mine, and never explored far from home. Enter Sabre, a small but focussed, Australian explorer which has started " kicking rocks " about 40 kilometres from Tsumeb and finding rich copper mineralisation on the surface.
News of what Sabre has discovered has not travelled far. The stock is trading around A38 cents, valuing the business at a modest A$36 million. But, dig a little into Sabre, which is what Minesite's Man in Oz did during his annual visit to the Mining Indaba conference in Cape Town, and you make a more than useful discovery. Basic exploration, such as rock chip sampling, mapping and geophysics at the company's Kaskara discovery zone have revealed more than 2.5 kilometres of surface evidence of copper, lead and zinc mineralisation, combined with evidence of the rarer minerals, gallium and germanium. The presence of the gallium and the germanium caught the eye of academic geologists, and it was in fact the University of Namibia which drew a connection between what Sabre's field crews have found and the rock types at Tsumeb.
Drilling, the only valid test of whether Sabre is onto something significant, is yet to occur at Kaskara, but is not far off. Sabre's general manager of exploration, Matt Painter, told Minesite over coffee in the cigar bar of the Westin Hotel in Cape Town, that a drilling campaign likely to cost around A$10 million will start around March, after the end of the northern Namibian wet season. The drillholes would have a target depth of around 200 metres, with news on the first assays likely to reach the market by mid-year.
Painter knows there is a lot riding on the first drilling. Finding surface-exposed mineralisation is exciting, especially in the modern era when it is assumed that everything which can be discovered on the surface has been discovered. But there was clearly disinterest from the previous company management at Tsumeb which chose to never step out far from the comfort zone of the mine. " We have been surprised by what we've found so far, with pretty basic exploration " Matt said. " The surface indications and the geophysics we have run indicate the potential for some pretty big anomalies. So far, our surface work has outlined 2.5 kilometres of surface indicators in an area up to 450 metres wide which correspond with the anomalies picked up by the geophysics ". Translated, Matt means that his ' geology by walking around ' has identified extremely encouraging indications. The next step will be to drill test what lies deeper.
Assays of what has been recovered in chip samples, an interesting but far-from-reliable exploration tool, have included results up to 23.5% copper, 32.1% lead and 34.4% zinc. Rich stuff indeed, and one of the prime reasons why Sabre is keen to get a rig on site as soon as possible. But, before that happens the company will need to top up its cash reserves, with a share issue likely to be bedded down over the next few weeks.
It is possible to see Sabre as just another mineral explorer churning out its story with gusto in the weeks ahead of a share placement. Such a view is understandable, especially as Minesite understands that other players in Namibian mining, including Kalahari Minerals, are watching this new arrival very closely. Everyone, it seems, is now interested in Sabre's emerging exploration as a play in a richly-mineralised location, close to one of the world's once-great copper mines, Tsumeb.
Like Extract and Kalahari, which acquired their red-hot uranium tenements to the south of the giant Rossing mine, Sabre has snapped up, almost by accident, a copper prospect which is showing the hallmarks of being analogous to Tsumeb. The germanium and the gallium are primary pointers to something significant at depth. All of which adds up to a good reason to open a file marked Sabre Resources - if only to follow a very interesting exploration program.
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